Limahart Pty Ltd v Kogarah Council

Planning controls 4 The site and adjoining lands to the north, west and south are zoned Residential 2(b) Residential (Medium Density) pursuant to Kogarah Local Environmental Plan 1998 and in this zone multi-unit housing development is permissible with development consent. The relevant objectives of this zone are to provide areas of multi-unit housing in appropriate locations and encourage a diversity of dwelling types. In this context clause 7(2) of the LEP requires that consent shall not be granted unless the consent authority is of the opinion that the carrying out of the development would be consistent with the objectives of the zone.

5 Also applicable to the site is Kogarah Council's Residential Design Guide 2005-Development Control Plan ("the DCP") and State Environmental Planning Policy No. 65-Design Quality of Residential Flat Development ("SEPP 65"). Advertising and resident objections 6 The application was notified in its original and amended forms and six submissions were received from neighbouring properties. Matters of concern include: loss of privacy; excessive overshadowing; excessive building bulk; construction noise; and devaluation of properties. One of those neighbours Mr S Nandakumar of 42 Ocean Street explained these concerns on his behalf and on behalf of his neighbours at 38 and 40 Ocean Street in detail when the Court visited his property.

7 Mrs M Calis also gave evidence on behalf of her parents Mr & Mrs Tzitziris of 55 Gray Street in relation to the acquisition of that property and the impacts arising from the proposal including loss of privacy, overshadowing, noise and building bulk. Council's decision 8 The application was refused by notice of determination dated 25 May 2006 for reasons relating to: the isolation of the adjoining property (55 Gray Street); the need for a revised BASIX certificate; and non-compliance with density, unit and bedroom sizes.

Expert evidence 9 Expert town planning evidence was given orally and in the form of a joint report by Mr L. Fletcher and Mr K Smith. The issues 10 The Statement of Issues contains 11 separate issues dealing with matters including site coverage, visitor carparking, access ramp, site distances, overlooking, stormwater drainage, room sizes and the BASIX certificate. Many of these issues have now been resolved by changes to the proposal and the conditions of consent and the provision of an updated BASIX certificate. The remaining issues for the resolution of the Court comprise: o Whether there are any adverse amenity impacts on neighbours, o Whether the proposed development is unacceptable as a consequence of non-compliance with the density/floor space ratio requirements in the DCP, o Whether the proposed development will unreasonably constrain the future development of 55 Gray Street by the isolation of that site. Amenity impacts 11 In relation to the issue involving adverse impacts on neighbours, I note that those impacts mainly comprise matters of: loss of privacy; overshadowing; and noise. Mr Smith and Mr Fletcher considered these impacts and essentially agreed that they are all within reason taking into account the zoning of the subject land and the affected lands upon which multi-unit housing is permissible, as well as the substantial compliance with the associated provisions of the DCP. Of particular relevance here is the manner in which the proposal responds to the setback controls in Figures 6 and 7 in Appendix 4 of the DCP. I agree with their conclusions in this regard for the reasons that they have given and consequently would not reject the proposal in relation to amenity impacts on neighbours.

Density 12 In relation to density, s 4.2 of the DCP requires a minimum site area of 1.1 sq m per dwelling to ensure that development sites can adequately accommodate appropriate development and residential flat buildings. On the basis of the area of the site, the maximum permissible floor area is 1,212 sq m. By comparison the proposal has a floor area of 1,565 sq m. This represents an exceedence of 353 sq m.

13 In supporting the exceedence Mr Smith pointed out that the building envelope controls including the impervious site area standard (which are substantially complied with), allow greater bulk (and floorspace) and as a consequence the site area requirement is too onerous. This is supported by the NSW Residential Flat Code that suggests floor space should be equal to 75% of the maximum building envelope and the proposal complies with this. Also, strict compliance with the standard would not result in any discernible difference in the streetscape appearance of the development.

14 Mr Fletcher acknowledged the substantial compliance with the building envelope controls, but was nevertheless concerned by the significant non-compliance with the site area standard. In this regard he argued that Court's Planning Principle in PDE Investments No 8 Pty Ltd v Manly Council (2004) NSWLEC 355 should be applied. This principle deals with the question of whether a building envelope can be filled when the FSR control would produce a smaller building which is the situation here. In essence the principle requires that the two controls should work together and where a maximum FSR results in a building that is smaller than the building envelope it is not necessary that a development proposal should fill that envelope. The fact that the building envelope is larger than the FSR is not a reason to exceed the FSR and the application of this principle means that the site area standard should be complied with. As a consequence the building has an excessive bulk and scale.

15 Planning principles published by the Court are not legally binding and do not prevail over development control plans. They can be used where the application of such plans, as appears to be the case here, can produce two different outcomes. However, notwithstanding the need for consistency, their application is subject to the circumstances of each case and the discretion of the consent authority. Accepting that the proposal substantially complies with the envelope controls but exhibits a significant non-compliance with the site area standard and applying the PDE principle to the extent that it requires both controls to be complied with would seem to indicate the unacceptability of the proposal.

16 Despite this, I have decided that the principle need not be applied in this case, and instead I give determinative weight to the site-specific controls in Appendix 4 of the DCP. In Figures 6 and 7 these controls not only provide a building envelope for developments in Gray and Ocean Streets but also specifically depict a four-storey building fronting Gray Street. These particularised controls can be distinguished from the site area requirements that apply generally to residential flat buildings and can thus be given greater weight. Given that there are no amenity impacts of any determinative significance nor is there any suggestion that in terms of streetscape the proposal would have an excessive bulk and scale I am satisfied that the proposed development would be appropriate . Plainly the site can adequately accommodate this multi-unit housing development. Taking also into account the approved four storey building on the adjoining site to the north, I have decided that the application should not be refused on the basis of the non-compliance with the site area requirement in the DCP. Site Consolidation 17 In addition to the site area requirements in the DCP, subsection 1 of s 4.4 also deals with amalgamation and access requirements for multi-unit housing as follows: (a) Council will not approve any development, which in the opinion of the council, would result in any other allotment of land being isolated and left without future development capacity. Such development capacity will be determined by considering whether the site would be capable of having a similar type of development.

(b) Applicants for multi-unit housing must include with their Development Application a street plan of adjoining lots which shows the effect of the proposal on remaining allotments to demonstrate that the proposed development will not result in a single lot being isolated.

(c) Where it is apparent that a site or sites will be left in isolation the proponent must submit sufficient documentation with the development application to demonstrate that reasonable attempts have been made to incorporate the adjoining sites in the development. This documentation must include copies of correspondence between parties and any formal financial offers and responses to offers. If necessary Council may require the proponent to fund an independent valuation report. 18 More particularly and by reference to Fig 5, the site-specific controls in Appendix 4 to the DCP provide for the consolidation of conventional sized residential lots to facilitate higher density development. The associated objectives require that no properties are left in isolation with reduced development potential. The subject land is shown in Fig 5 as being included in Site 5 and, as a result of the development consent issued for the adjoining Site 4, the associated controls require the consolidation of the four lots numbered 49, 51, 53 and 55 Gray Street for the purposes of a single development. Taking into account the subject proposal involving 49 - 53 and the existence of the residential flat building at 57 - 59 Gray Street, this will leave 55 Gray Street as an isolated site, hence s 4.4 is applicable. Incorporation of No 55. 19 In Karavellas v Sutherland Shire Council [2004] NSWLEC 251, Tuor C dealt with the issue of site amalgamation and lot isolation and identified two questions that needed to be addressed before consent could be granted: + Whether reasonable efforts have been undertaken to facilitate amalgamation of the isolated property into the development site, and + What are the consequences if amalgamation of the isolated property is not feasible? 20 In Melissa Grech v Auburn Council [2004] NSWLEC 40, Brown C developed three main principles in relation to the first question in Karavellas: o Firstly, where a property will be isolated by a proposed development and that property cannot satisfy the minimum lot requirements then negotiations between the owners of the properties should commence at an early stage and prior to the lodgement of the development application. o Secondly, and where no satisfactory result is achieved from the negotiations, the development application should include details of the negotiations between the owners of the properties. These details should include offers to the owner of the isolated property. A reasonable offer, for the purposes of determining the development application and addressing the planning implications of an isolated lot, is to be based on at least one recent independent valuation and may include other reasonable expenses likely to be incurred by the owner of the isolated property in the sale of the property. o Thirdly, the level of negotiation and any offers made for the isolated site are matters that can be given weight in the consideration of the development application. The amount of weight will depend on the level of negotiation, whether any offers are deemed reasonable or unreasonable, any relevant planning requirements and the provisions of s 79C of the Environmental Planning and Assessment Act 1979. 21 In relation to the first test in Melissa Grech, I note that the Development Application is dated 17 November 2005, and according to Mr K. Mason the director of the applicant company he wrote to the owners of 55 Gray Street on 26 November 2003, indicating a wish to purchase the property in order to amalgamate it with adjoining properties. Plainly the first test in Melissa Grech test has been met.

22 In relation to the second and third tests it is plain from the materials, including letters and notes of meetings, provided to the Court in Exhibit F and the evidence of Mrs Calis that negotiations between the owners of 55 Gray Street and the applicant involving offers to purchase continued from November 2003 until relatively recently. These negotiations were ultimately unsuccessful.

23 The question that thus arises is whether the negotiation and offers made by the applicant were reasonable; based on at least one recent independent valuation and whether the offers made include other reasonable expenses likely to be incurred by the owner in the sale of the property.

24 On 8 February 2005, a valuation of 55 Gray St was carried out by Mr J D Frape a registered valuer who concluded that the then current market value of the property was $690,000. In reaching this figure he added: likely reasonable expenses associated with the sale of the property; removal expenses; legal costs; stamp duty; and a solatium for long occupation. On further consideration and on the basis of this valuation Limaheart made an offer in March 2005 for purchase of the property for the amount of $736,540 subject to the obtaining of development approval for a development including the 55 Gray St and various other settlement conditions.

25 Mr and Mrs Tzitziris advised shortly afterwards that they would sell their property but wished to negotiate some of the conditions and terms of sale, subsequently advising that they would prefer an outright sale instead of the option arrangement as offered. In early April 2005 Limaheart offered to purchase the property outright for the sum of $650,000, subject to suitable finance being arranged. Subsequent correspondence from Limaheart sought further negotiation and this eventually occurred in late April 2005. In early May 2005 Mr and Mrs Tzitziris made a counter offer with a purchase price of $740,000 conditional upon a maximum 12 months settlement period to enable the acquisition of a replacement property. This was followed by a further communication in early June 2005 advising that the sale would not proceed unless the price was $780,000.

26 In early July Limaheart confirmed $780,000 as an indicative purchase price subject to bank approval. Shortly afterwards Mr and Mrs Tzitziris advised that they agreed that the sale could proceed on the basis of: a sale price of $780,000; a 10% deposit; and settlement minimum 42 days from exchange and a maximum of 12 months depending on when they could find a replacement property.

27 Further negotiations concluded unsuccessfully in mid July seemingly on the basis that Limaheart could not, on the basis of commercial considerations and uncertainty, accept an extended settlement period that relies on Mr and Mrs Tzitziris finding a suitable replacement property. Conversely, taking into account Mr and Mrs Tzitziris's advanced age and their concerns about moving and the difficulty in obtaining a replacement home in a suitable location one can understand why they require an extended settlement period. In these circumstances, I accept that the second and third principles in Melissa Grech are met and consequently the applicant has satisfied the reasonable efforts question in Karavellas. Similarly, I accept that site isolation requirement 1(c) in s 4.4 of the DCP is also met Failure to amalgamate 28 The second question in Karavellas requires consideration of the consequences of the failure to amalgamate 55 Gray Street with the property the subject of the development application, leaving it as an isolated site. In order to address this matter the applicant provided a schematic design for this site by architects Stephen Jones Associates for a three-storey plus basement multi-unit housing development. This design initially provided for basement level vehicular access from the subject development although and alternative design with access of Gray Street was provided.

29 An examination of this design by the two town planners revealed that it fails to meet a number of requirements in the DCP including setbacks and site coverage. It would also have a lower density than might otherwise have been expected. Mr Fletcher said that original basement design was very impractical and although the revised design is much better there are still problems involving excessive manoeuvering requirements and stacked carparking spaces. There are inadequate landscaping opportunities. He was also concerned that the form of the building would be uncharacteristic and thus inappropriate in the streetscape. Hence it would not be a like type of development as required by the DCP. Mr Smith acknowledged that whilst the floor area and parking requirements can be met, various requirements including site area, frontage and setbacks were not met. The design was nevertheless indicative of what is practically possible on this site, being potentially a smaller boutique type of development.

30 As noted above the applicable zone objectives include the provision of multi-unit housing in appropriate locations and the encouragement of a diversity of dwelling types. The DCP also encourages the provision of a range of building types providing increased housing choice. Taking into account that the zone also permits townhouses, villa homes and group homes, I accept that a development something like the schematic design could meet these objectives. Such a design may well end up being different to its neighbours and introduce a variation to the rhythm of the streetscape but taking into account the variety of buildings in the surrounding area and I do not in the circumstances see this as an impediment.

31 Whilst the schematic design does not meet a number of numerical requirements in the DCP, s 1.1 thereof recognises the importance of outcomes rather than compliance with numerical requirements. It is reasonably apparent that as an isolated site its development potential may not be as great as a larger site but a satisfactory outcome is possible. I thus do not see this as a negative consideration.

32 In the circumstances I accept that at 55 Gray Street would not be left with no opportunity to provide a development having a reasonable form and having reasonable amenity because I am satisfied that an appropriate infill building could be designed for this site. I thus also accept that the site isolation requirement 1(a) in s 4.4 of the DCP is also met. Conclusion 33 All things considered, I have been persuaded that the carrying out of the proposed development would be consistent with the objectives of the 2(b) zone. I am also satisfied that whilst complete site consolidation, incorporating 55 Gray Street may be preferable the development here proposed warrants approval. In my opinion the provisions of the DCP including those relating to site consolidation have sufficiently been met. Consequently the appeal should be upheld and conditional consent granted. Orders 34 The orders of the Court are therefore: 1. The appeal is upheld.

2. Development application No 499/05 for the demolition of three dwelling houses and the erection and strata subdivision of a four-storey plus basement building containing 16 dwellings at 49-53 Gray Street, Kogarah is determined by the granting of development consent subject to the conditions in Annexure 'A' hereto.

      T A Bly
      Commissioner of the Court
      ljr

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